Metals and miners update

Common wisdom has it that metals are working on 5 of A of a massive bear market.  Perhaps that is true.  But common wisdom has been wrong before.  What if this is 5 of C?  Those who say metals will go down in deflation have not explained why metals have been going down while the stock markets have been rocketing.  Perhaps the metals are already deflated.  Perhaps the market has monitized metals already. 

We know that trading houses have been accepting gold as a reserve instead of cash to anchor the trades for some time now.  What if metals were sold off in order to generate cash with which to speculate in the stock market?   If this was true then where will money go once stocks prove that they have peaked and are now a losing proposition?  Sure, some of the money can be stored in dollars but some can also be stored in real money such as gold and silver.  Nobody really knows where we are in the cycle, models are all we have.  I have found that when too many people believe in the same model, it's time to consider other possible models.  One of those models is that the collapse in metals has been an a-b-c deal as shown below.

Regardless of where the larger wave count actually is, we should really be nearing some kind of significant bottom for M+M right now.  The RSI is again at multi-year extremes and this never lasts.  In addition, I can count 5 waves down from [B] and, as shown by the red parallelogram, black 5 is now about the length of black 1 which is what we expect in cases where the 3rd wave is extended.  The last year of ups and downs do count like a 4th.

Here is just that final wave (black 5 as labeled above).  I don't know that it is correct but with EW being right all the time is not important.  It is more important to know when you are wrong and this count will be wrong if a lower low is found than $16.18.  The value of this analysis is that the current price is only ~20 cents above that low.  So there is not much to lose before your stops should kick in.  You might have to do this intelligently several times before you find the right entry point, but each time you will only lose a few cents and when you do get it right the gains are measured in dollars, not cents.

This is my strategy.  It is akin to being allowed to play poker where the ante is very cheap.  You can sit there for hours folding hand after bloody hand if you like because the loss per folded hand is low.  But eventually you will get dealt a hand with a high likelihood of winning and the other players cannot just fold on you to end the game.  At that point, the game runs until you sell.  This simple strategy is boring to some which is a good thing for me.  Too many play the stock markets for thrills.  I am in it for the money and the less thrills the better in the long run.